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Online legal advice

Digital on-line sellers: have you got to grips with the new VAT rules?

Tuesday, February 2nd, 2016

The new VAT rules have been in effect for over a year now and yet not many businesses are aware of them. In a nutshell a business may have to pay VAT on its sales even though it is not registered for VAT AND at a higher rate than the UK! How is this possible? In order to stop global companies from basing themselves in countries with lower tax rates, the lawmakers decided to create a level playing field for UK businesses by making them pay VAT on sales of digital products to the EU  at the rate applicable in the country they are selling to!

So how do you know if the rules apply to you? Find out in 5 easy steps:

  1. Determine whether you are supplying a “digital service” (because if it isn’t, the general place of supply of services rules will apply).
  2. Determine the status of your customer ie, business or non-business. If it is a non-business, the rules apply
  3. Determine the place of supply (ie, the member state).
  4. Determine whether the supply must be taxed at the member state’s standard or reduced VAT rate, or whether it is eligible for any VAT exemptions (eg, most member states exempt betting and gaming).
  5. You need to identify the place where your consumer is based, has their permanent address, or usually resides. This will be the member state where VAT on the digital services supply is due. So if, for example, a UK citizen is an ‘expat’ who works or lives most of their time in Spain, then you, as the person supplying digital services to that consumer, should be charging Spanish VAT on those services and not UK VAT.

There is a handy flow chart to help you decide whether the rules apply to you or not here.

For more information go to the government hub here


New rights for consumers coming soon! Get ready or face a fine..

Friday, July 24th, 2015

Have you heard about the new Consumer Rights Act coming into force on 1st October 2015? It creates a number of new consumer rights in relation to the sale of goods, services and digital content by traders to consumers.

We are updating our terms of business template now to ensure it is in line with the new law. Get in touch if you’d like us to help update yours! In particular, CHECK YOUR REFUND POLICY!

Here’s a brief summary to help you ensure you’re not falling foul of the law.

Consumer Rights image

Don’t wait until you are in court to sort it out!

If you sell goods

  • Along with all the existing standards like fitness for purpose, satisfactory quality, correspondence with description, goods must match a sample, there are new standards, including:
  • Goods must match a model seen or examined by the consumer, except where the trader has brought differences to the consumer’s attention.
  • New standard for installed goods – they will not conform to the contract if they are installed incorrectly.
  • A new right to reject faulty goods within 30 days for a full refund (NB this does not apply to perishable goods). You can extend this deadline, but you can’t reduce it.
  • Where a consumer prefers a repair/replacement, the time limit for a right to refund is paused until the goods are returned by the trader. If the item still doesn’t conform to the contract upon return, then the consumer’s right to reject is extended by a minimum of 7 days.
  • Once the 30 days has passed, traders now have one opportunity to repair or replace the faulty item, after which, if repair/replacement is not possible or successful, the consumer can request money off or reject the goods for a full refund.
  • After the first 6 months, any refund may be reduced by a deduction for use to take into account the use the consumer has had of the goods. However, if they make the request for a refund within 6 months, traders will not be able to make a deduction for use for the majority of goods.

If you supply Digital Content

Digital content includes paid for content and content that comes free of charge with physical goods.

  • A new right to repair or replacement if the digital content is faulty.
  • If the fault can’t be fixed within a reasonable time, or without causing the consumer significant inconvenience, they can get some, or all of their money back.
  • If they can show the fault has damaged their device and the trader hasn’t used reasonable care and skill, the consumer may be entitled to a repair or compensation.
  • The consumer has a right to a refund if the business does not have the right to provide the digital content.

If you provide Services

  • Consumers have a new right to ask the trader to repeat or fix a service if it’s not carried out with reasonable care and skill, or get some money back if they can’t fix it within a reasonable time.
  • If services aren’t provided within a reasonable time, they now have a right to a price reduction.
  • If a price has not been agreed upfront, what the consumer is asked to pay must be reasonable.
  • If a time hasn’t been agreed upfront, it must be carried out within a reasonable time.

 Special points to note:

  • Do you know about the pre-contract information requirements set out in the Consumer Contracts Regulations? They are implied terms, which means they apply automatically and if you haven’t given all the necessary information to the consumer before they enter into a contract with you, you will be in breach of contract and liable for refunds. Ask us if you aren’t sure what we’re talking about!
  • Terms governing price and subject matter must be prominent and transparent in your terms of business. So you cannot reduce them in size and hope nobody notices!
  • Law enforcement agencies will be able to obtain a court order if you fail to comply with the Consumer Rights Act. If you do not comply with such a court order, you may end up with a penalty of an unlimited fine and/or two years imprisonment. So it’s a good idea to get to grips with the new law ahead of 1st October!!

Selling online? Be clear on the price

Wednesday, February 4th, 2015
Image copyright Success Pacific

Image copyright Success Pacific

By law, under the Consumer Contracts Regulations, you must tell consumer customers exactly what they are paying for and you cannot assume anything. SO this means you set out the following details under your pricing terms  BEFORE the customer is committed to the sale:

  • The total price of the products inclusive of taxes or (if the nature of the product is such that the price cannot reasonably be calculated in advance) the manner in which the price is calculated.
  • Where applicable, all additional delivery charges and any other costs (for example, postage, packing or insurance) or, where those charges cannot reasonably be calculated in advance, the fact that such additional charges may be payable.
  • In the case of a contract of indeterminate duration or a contract containing a subscription, the total costs per billing period or (where such contracts are charged at a fixed rate) the total monthly costs.
  • The telephone charges or other communication costs where that cost is calculated other than at the basic rate.

Remember: When selling to consumers, all prices must include value added tax (VAT). If the amount of VAT is not stated, it is implied that the price is inclusive of VAT.

3 biggest mistakes to avoid when dealing with website developers

Tuesday, February 3rd, 2015

In the heat of excitement about launching a new service or product on-line, most budding entrepreneurs appoint a website developer. The discussion focusses on the design and functionality and cost.  People rarely think of entering into a proper contract- after all what could go wrong and anyway “It’s my mate’s friend……”

Copyright Optimum Design Technology

Copyright Optimum Design Technology

Well I hate to be a doom and gloom merchant, but here are some real stories and facts about what can happen with no terms in place:

  1. You may not get your website on time! I had a client who did have a contract with her developer, but it did not say when the website had to be ready. She did not see this and went ahead and bought all the stock that she was going to sell via her website in time for Christmas. The website was not ready in time for Christmas. She was unable to sell the stock and went bankrupt with no recourse against the developer.
  2. You may not own the content and design. Without an agreement to the contrary, if somebody designs something for you such as a website or a logo, they will own the intellectual property rights in that content, even if you have paid them. So you may find you just have a licence to use your content which can be withdrawn at any time! If you later want to sell the website and brand, it may not be yours to sell!
  3. Your website developer may be able to shut you down. Many developers offer to host your website as well as carrying out the development. Most people think that is very convenient and that it is all one and the same thing. I would strongly advise against this and make sure YOU are in control of hosting at all times. To use a non-IT analogy, your website is like the stage set for a play in a theatre. Your website designer is the set designer. By allowing the website designer to do the hosting, it is like giving the designer the keys to the theatre aswell and keeping none for yourself.Would you do that? I have had many a client come to me where they have fallen out with the webdesigner and the webdesigner has simply pulled the plug on the hosting and the whole website disappears.

So I would strongly advise that in your first step into the world of on-line business, please draw up a proper agreement with your developer- even if they are a friend. If you do not know where to start,we can help. Look out for our next blog with the checklist of key terms for website development contracts.


Website owners- tell your customers how to pay orelse..

Tuesday, February 3rd, 2015

Selling on-line to consumers? Did you know…

You must make it clear when customers will be parting with their money. Usually websites require customers to click on a button to proceed. From now this button must be labelled with clear wording such as ‘order with obligation to pay’ or ‘buy now’, ‘pay now’ or ‘confirm purchase’. Not acceptable are phrases such as ‘register’, ‘confirm’ or ‘order now’ and unnecessarily long phrasepaynow 3s that may effectively conceal the message about the obligation to pay. See the Consumer Contracts Regulations for more information.

pay now 1 paynow 4

Beginner’s guide to new VAT rules on digital products

Wednesday, January 21st, 2015

You may have recently seen articles in the press regarding the new ‘VAT Moss’ rules and wondered what on earth it is all about. The idea is that where digital services are supplied on a business to consumer basis, the supplier is responsible for accounting for VAT on the supply to the tax authority at the VAT rate applicable,in the consumer’s EU member state. This applies even if the supplier is not VAT registered

VATThe aim is to create a level playing field for UK businesses by removing the current competitive advantage of EU member states with lower rates of VAT.

So how do you know if the rules apply to you? Find out in 5 easy steps:

  1. Determine whether you are supplying a “digital service” (because if it isn’t, the general place of supply of services rules will apply).
  2. Determine the status of your customer ie, business or non-business. If it is a non-business, the rules apply
  3. Determine the place of supply (ie, the member state).
  4. Determine whether the supply must be taxed at the member state’s standard or reduced VAT rate, or whether it is eligible for any VAT exemptions (eg, most member states exempt betting and gaming).
  5. You need to identify the place where your consumer is based, has their permanent address, or usually resides. This will be the member state where VAT on the digital services supply is due. So if, for example, a UK citizen is an ‘expat’ who works or lives most of their time in Spain, then you, as the person supplying digital services to that consumer, should be charging Spanish VAT on those services and not UK VAT.

There is a handy flow chart to help you decide whether the rules apply to you or not here.

For more information go to the government hub here

PS ‘Moss’ stands for ‘mini one stop shop! No moss was harmed in this ruling!

Information to be provided by website owners- if you don’t, customers don’t have to pay!

Monday, October 13th, 2014

Here is a list of the ‘pre-contract’ information that all website owners who supply goods or services to consumer customers ( as opposed to business customers) have to provide under the new Consumer Contracts Regulations– if not, consumers don’t have to pay for the goods or services supplied or they could have extended cancellation rights!!!

  • the main characteristics of the goods, services or digital content – you must give as much information as the means of communication allows
  •  your identity – such as your trading name

    Do your customers know who you are?

    Do your customers know who you are?

  •  the geographical address where you are established and, where applicable, a telephone number, fax number and email address to allow consumers to be able to contact you quickly and efficiently *
  •  if you are acting on behalf of another trader, their identity and geographical address *
  •  if you, or the trader who you are acting for, have a different address for consumer complaints this must also be given *
  • the total price of the goods, services or digital content inclusive of tax (such as VAT). If this cannot be calculated in advance you must say how this will be calculated
  •  all delivery charges or any other costs – if these cannot be calculated in advance you must state that they are payable
  •  the monthly, or billing period, costs of open-ended contracts or subscriptions
  •  any additional costs for using a specific means of distance communication to make the contract – for example, if you make an extra charge for buying by phone as opposed to online *
  •  the arrangements for payment, delivery or performance and the time that you will take to deliver the goods, perform the services or supply the digital content *
  • if you have one, your complaint-handling policy. Providers of services should have a complaint-handling policy in place as required by the Provision of Services Regulations 2009. In addition TSI approved codes of practice and some trade associations and professional bodies will also require a policy to be in place, which must be made available to consumers *
  • the conditions, time limits and procedure for exercising a right to cancel, if there is one . This information may be provided by correctly filling in and providing the ‘Model instructions for cancellation‘ provided by the Regulations
  •  if you are expecting consumers to pay the costs of returning the goods after cancellation you must tell them, or if the goods cannot normally be returned by post (they are too large, for example) you must advise consumers of the cost of returning them. This information may be provided by correctly filling in and providing the ‘Model instructions for cancellation’ (see link above) *
  • if you are offering a service contract that a consumer can expressly ask you to start within the cancellation period, you must tell him that he will be required to pay you the reasonable costs of the service that you have delivered up to the time of his cancellation within the cancellation period. This information may be provided by correctly filling in and providing the ‘Model instructions for cancellation’ (see link above) *
  •  if there are no cancellation rights for specific goods, services or digital content that you offer or there are circumstances in which consumers will lose their right to cancel you must inform them of this *
  •  if you are selling goods you should remind consumers that the goods you sell must be in conformity with the contract – for example, you might say: ‘It is our responsibility to supply you with goods that meet your consumer rights. If you have any concerns that we have not met our legal obligations please contact us’ *
  •  if you offer any after-sales consumer assistance, services or guarantees you must make consumers aware of this and any applicable conditions *
  •  if you are a member of a code of conduct you must inform consumers how they can obtain a copy of the code – for example, by providing a link to the code sponsor’s website *
  • if the consumer will enter into a contract of a fixed duration, he must be informed what this is. If the contract has no fixed length, or can be extended automatically he must be informed of the conditions


*If the means of distance communication that you are using limits the space or the time that is available to provide the information, these items may be provided in a different but appropriate way.

You must give consumers the information listed above in a way that is clear, comprehensible and appropriate to the means of distance communication before they enter into a contract with you. In addition, if you provide this information on a durable medium you must make sure that it is legible.

A ‘durable medium’ is defined as paper, email or other medium that:

  • allows the information to be addressed personally to the recipient
  • enables the recipient to store the information and access it for future reference (this will include you placing the information in your customer’s personal account area of your website, which he can access by logging in)
  • allows unchanged reproduction of this information. SO you can’t just provide a link to terms on your website as you may change them at some point.

If you sell goods online, our template E commerce terms of sale, cover all of the above and come complete with guidance notes and 30 minutes free advice if you get stuck.


Calling all on-line sellers: New Consumer Contracts law applies to YOU!

Sunday, October 12th, 2014

From June 2014 new regulations apply to everyone who:

  • sells to consumers ( as opposed to businesses)
  • without meeting face to face e.g. sells online or over the phone ( so- called “Distance Contracts”) or door- to -door ( so-called “off- premises contracts”)

Previously the Distance Selling regulations applied but they have now been overtaken by the Consumer Contracts Regulations which impose a number of additional steps sellers must take otherwise they face criminal charges, shut down orders and bad publicity! The purpose of the law is to provide consumers with more transparency on who they are actually dealing with, what they are buying and alerting them to the fact that they may change their mind once they have clicked on ‘BUY’!

Distance Sales

“If only it were this simple!”

In a nutshell the obligations mean that a trader must:

  1. Provide so-called ‘pre-contract’ information i.e. information about the service or products before the customer is committed to buying the service or products AND
  2. Provide certain information after the contract is concluded

What  ‘pre-contract’ information must be provided?

  • Key information about the identity of the trader and the products and many other things too many to list here
  • If the consumer has a right to cancel, a Model Cancellation Form which must follow the set format specified in the Regulations. The consumer does not have to use it, but the trader must nevertheless provide it!

Note that failure to provide this information is a criminal offence so you need to act now to make sure you comply! There are additional penalties too: your customer’s right to cancel is extended and you will have no right to charge them for the use of the service or products up to the point that they cancel.

When and how must you supply the pre-contract information?

The trader must give the pre-contract information and cancellation form before the consumer is bound by the contract- so in practice any time before they are committed e.g. by clicking on ‘Buy Now’ or other button or if contracting over the phone, any time before they place their order.

The trader can give the pre-contract information and Model Cancellation Form to the consumer by either of the following methods:

  • On paper
  • If the consumer agrees, on another “durable medium” e.g. e-mail

What information must be provided once the contract has been concluded?

The trader must give the consumer one of the following:

    • A copy of the signed contract.
    • Confirmation of the contract.

The copy or confirmation must be provided within a “reasonable time” after the contract is formed, and in any event no later than the time of delivery of any goods or before performance begins of any service.

By what means must you provide the information?

By good old fashioned paper letter or by email. Note that the email must set out the full terms and you cannot simply send an email with a link to your terms. This is because the idea is that there is a record of what has been agreed that cannot be altered at a later date. If you just provide a link, the terms at the end of the link could be altered at some point in the future.

Where do you start????

We know you are a busy entrepreneur and news of these new laws and obligations is probably the last thing you need or have time for, so we have done the work for you.

Just 3 easy steps :

  1. E- mail us for our free questionnaire to see if you comply with new law. It will only take 3 minutes and will reveal if you do or not comply with the new law.
  2. If you don’t comply, turn to our ‘oven ready’ document shop which has brand new template for selling goods and digital products online which complies with new law. It has all of the relevant pre-contract information and model cancellation form.
  3. If you sell services, drop us a line or give us a call so that we can check your terms or provide you with fresh ones.

Alternatively, you can trawl through over 100 pages of the Regulations and work it out for yourself. Enjoy!!

How to spot website scams

Sunday, December 1st, 2013

I cannot beleve we fell for this, but I was in a rush and I wanted to buy some UGG boots as a gift. The website looked authentic enough and even had reviews from satisfied customers. However, when the boots arrived complete with the UGG logo on the heel, they instantly felt too light to be sheepskin which made us take a closer look. Turns out they were synthetic and completely fake. They even came with a care booklet that had an UGG original hologram sticker on it! Phishing-Scam

When we tried to contact the seller to return them and get our money back, surprise surprise, there was just an email address and the answer was no refunds. There was no actual company name or geographical address. How could I as a lawyer have overlooked that when it is the first thing I tell my clients to put on their websites?? I could have kicked myself. This is a LEGAL requirement precisely in order to avoid the situation I am in.

On contacting the post office to see who the sender was, again they had clearly covered up their tracks and there was no address. So it looks like we may have lost our money although Trading Standards are looking into the matter.

So what can you look out for?

  1. The website address: this is unusually long. For example the fake one is  whereas the original one is
  2. Contact details: if there are none, don’t go near the site! By law there should be a full postal address.
  3. Website language: is the language good English or slightly odd or as if written by someone for whom English is a second language? You would not expect this from an English speaking company
  4. Legal terms & conditions: by law a website should have a Privacy Policy and Terms & Conditions of sale which at the very least should point out your legal right to return the goods under the Distance Selling Regulations.

And what can you do?

If you are lucky enought to have paid by credit card, then you may get your money back via the credit card company. If you pay by debit card, then that is not possible.

You may change your mind dear customer..

Thursday, January 17th, 2013

Not many people are aware of a customer’s legal “cooling off” rights. This has nothing to do with plunging them into a pool of icy water or having to take a walk around the block after losing their temper! It is more about the cold feeling that comes over an internet shopper when the eagerly awaited item arrives and it is nothing like the picture or what they were expecting. A bit like the time when I ordered what I thought was a lovely looking skirt from the Scottish Highlands. Upon its arrival, I happily put it on for a quick ‘cat walk’ before a panel of teenage offspring. One look at their faces along with stifled giggles and mutterings of “blanket with legs” reminded me that I too had cooling off rights! SO what are these rights?

Cooling off rights

Another way to cool off!

In an attempt to encourage consumers to make purchases over the internet, the law makers decided it would be a good idea to give them the right to change their mind. This gave rise to the Distance Selling Regulations which kick in automatically no matter what your terms and conditions say. Here is a snapshot of the cancellation rights in particular:


  • consumer customers have 7 working days starting from the day after the goods arrive to change their mind and return the goods to the supplier;
  • in the case of contracts for services, consumers have seven days from the day after the contract was concluded to cancel the contract. It is always an option to say to the customer that they can start receiving the services right away, but they must waive their cancellation rights
  • the customer must tell the business in writing during that time that they wish to do so;
  • the business must refund the cost of the goods and the initial postage to the customer within 30 days AND if the business has not expressly said so in its terms, the business has to pay for the return postage too
  • businesses must tell customers of this cancellation right before the contract is concluded- it is no good keeping quiet and hoping that the 7 days will pass unnoticed
  • there are exceptions to these rules, notably for perishable goods, customised orders made specifically for a customer, audio and downloadable products and CD’s once opened , newspapers and magazines

The Regulations require businesses to take many other steps and these will be covered in another article. Remember too that these Regulations started as a European directive and so will have been implemented across Europe. This means that if you allow consumer customers from abroad to buy your products, they too have automatic rights to cancel, with possibly more time to do so. So it is best to expressly limit sales to UK customers unless you are sure of the foreign law.

If you are worried your terms of sale do not comply with the Regulations, there are always the Terms of Online Sale available in our ‘oven ready’ document shop